Bush Administration Issues Final Regulation on Medicare Prescription Drug Card
The Bush administration on Friday issued its final regulation regarding a "long-delayed" Medicare-endorsed prescription drug discount card program that would reduce medication costs for seniors and people with disabilities, the Washington Post reports. The regulation, which is based on a proposal by President Bush last summer, was first proposed in March and has gone through a public comment period (Kaufman, Washington Post, 8/31). Under the terms of the program, seniors would pay up to $25 for one of several drug discount cards offered by private organizations and endorsed by Medicare. When used to fill prescriptions, the cards would give seniors discounts of 10% to 13%. The savings would be the result of discounts and rebates the organizations negotiate with drug companies (Kemper, Los Angeles Times, 8/31). Prescription drug discount cards already are sponsored by various health care providers, chain drug stores and advocacy groups such as the AARP. The cards could eventually offer "more substantial" discounts as they become more popular because organizations would be able to use their buying power to negotiate lower prices with drug companies. HHS officials estimate about 10 million people would enroll in the program and that each would save about $170 per year (Washington Post, 8/31). To be endorsed by Medicare, card providers would have to guarantee discounts for at least one drug in 119 medical categories and would be required to post drug prices on the Internet for comparison purposes (Meckler, AP/Philadelphia Inquirer, 8/31). In addition, card providers would have to "prove they have experience in the field" and would not be permitted to raise drug prices or remove a drug from the discount list for 60 days at a time (Washington Post, 8/31).
Opposition from pharmacies and legal challenges to the program could prevent it from taking effect, the Los Angeles Times reports. After the National Association of Chain Drug Stores and the National Community Pharmacists Association filed a lawsuit claiming the drug card plan was unconstitutional, a federal judge ruled in September 2001 that HHS lacked the constitutional authority to implement the program. The judge said the Bush administration could use the "normal, public rule making process" to craft a new plan (Los Angeles Times, 8/31). Pharmacy groups say they plan to legally challenge the program once again because it would force additional costs on drug stores. If the program is declared unconstitutional, HHS officials said they will ask Congress to pass legislation giving the government the power to create such a plan (Washington Post, 8/31). U.S. District Judge Paul Friedman is expected to rule on the program in the next several months, the Times reports (Los Angeles Times, 8/31).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.